UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

EASTERN DIVISION

GLOBAL COOLING, INC.,

Plaintiff,

Case No.: 2:11-CV-1083

-v- JUDGE SMITH

Magistrate Judge Abel

E.C. SAGITTAR B.V., et al.,

Defendants.

OPINION AND ORDER

Plaintiff Global Cooling, Inc. initiated this case against Defendants E.C. Sagittar B.V. and

Alfred Uytdewilligen in the Athens County Court of Common Pleas and Defendants removed it to

this Court on December 5, 2011. After the filing of an initial motion to dismiss, then an Amended

Complaint, this matter is now before the Court on Defendants’ Second Motion to Dismiss the

Second and Third Counts of Plaintiff’s Second Amended Complaint (Doc. 42). Plaintiff has

responded and this matter is now ripe for review. For the reasons that follow, Defendants’ Motion

is GRANTED.

I. BACKGROUND

Plaintiff Global Cooling, Inc. (“Global”) is an Ohio corporation with its principal place

of business in Athens County, Ohio. Plaintiff is in the business of developing technology and

commercial applications for such technology in the field of free-piston Stirling engines and has

developed valuable intellectual property and trade secrets relating to the Stirling engines. 

Defendant E.C. Sagittar B.V. (“Sagittar”) is a corporation organized and existing under

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the laws of the Netherlands and having its principal place of business in Doetinchem, the

Netherlands. Defendant Alfred Uytdewillingen (“Alfred”) is a citizen of the Netherlands and

CEO of Sagittar. 

Some time before October 10, 2008, Defendants came to Ohio to solicit Plaintiff to

produce three new designs of Stirling engines to be used by Defendants’ customer, Microgen

Engine Corporation Holding B.V. (“Microgen”). At that time, Defendants had no Stirling

engine designs or technology. 

The parties entered into an Agreement on October 10, 2008, which provided that Plaintiff

would receive 45% of Sagittar’s capital shares in exchange for its designs, IP and technology,

and Defendants would have Sagittar merged into Microgen. Plaintiff produced the designs

pursuant to the Agreement and transferred them to Sagittar. 

On July 1, 2010, Plaintiff’s Chief Technical Officer, David Berchowitz, filed Patent

Application number 12/828,387 in the United States Patent and Trademark Office, which

covered some of the intellectual property transferred to Defendants (“Patent Application”). This

application was assigned Publication number: US 2011/0005220 A1 and remains pending. 

On November 30, 2010, Microgen had Sagittar, together with Plaintiff’s intellectual

property, engine designs and technology, professionally appraised. The appraisal showed the

value of Plaintiff’s designs and technology alone to have a fair market value of €11.9 million. 

Within 8 weeks after the appraisal, on February 1, 2011, Defendants transferred ownership of

Sagittar to Microgen through a Hong Kong holding company controlled by a Microgen officer

and Plaintiff was not informed of the transfer.

In October 2011, Plaintiff insisted on the transfer of the Sagittar capital shares, without

knowledge that Microgen now controlled Sagittar. When Defendants refused to comply,

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Plaintiff wrote letters to Defendants’ customers in order to protect Plaintiff’s intellectual

property rights. As a result of Plaintiff sending out these letters, Defendants threatened to sue

Plaintiff in the Netherlands. Plaintiff then promptly filed this case in Athens, Ohio. Shortly

thereafter Sagittar filed suit against Plaintiff in the District Court of Zutphen, the Netherlands.

In late May early June 2012, the parties entered into an agreement to resolve two counts

of this case whereby Plaintiff agreed to dismiss the Second and Third Counts of its First

Amended Complaint with prejudice, agreeing that those claims were preempted by the Ohio

Uniform Trade Secret Act. Despite this agreement, Plaintiff then filed its Second Amended

Complaint adding the current claims for unjust enrichment and conversion relating to intellectual

property covered by the patent application. 

In the Second Amended Complaint currently before the Court, Plaintiff brings the

following claims against Defendants: breach of contract, unjust enrichment as to intellectual

property covered by the patent application, conversion as to intellectual property covered by the

patent application, and violation of the Uniform Trade Secret Act as to intellectual property not

covered by the patent application. 

 II. STANDARD OF REVIEW

Federal Rule of Civil Procedure 12(b)(6) permits dismissal of a lawsuit for “failure to state

a claim upon which relief can be granted.” A Rule 12(b)(6) motion to dismiss is directed solely to

the complaint and any exhibits attached to it. Roth Steel Prods. v. Sharon Steel Corp., 705 F.2d 134,

155 (6th Cir. 1983). The merits of the claims set forth in the complaint are not at issue on a motion

to dismiss for failure to state a claim. Consequently, a complaint will be dismissed pursuant to Rule

12(b)(6) only if there is no law to support the claims made, or if the facts alleged are insufficient to

state a claim, or if on the face of the complaint there is an insurmountable bar to relief. See Rauch

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v. Day & Night Mfg. Corp., 576 F.2d 697, 702 (6th Cir. 1978). Rule 12(b)(6) must be read in

conjunction with Rule 8(a) of the Federal Rules of Civil Procedure, which requires the complaint

to contain a “short and plain statement of the claim showing that the pleader is entitled to relief[.]”

A court, in considering a 12(b)(6) motion to dismiss, must “construe the complaint in the

light most favorable to the plaintiff,” accepting as true all the plaintiff’s factual allegations. 

Gunasekera v. Irwin, 551 F.3d 461, 466 (6th Cir. 2009). Although in this context all of the factual

allegations in the complaint are taken as true, a court is “not bound to accept as true a legal

conclusion couched as a factual allegation.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555

(2007). Consequently, “[t]hreadbare recitals of the elements of a cause of action, supported by mere

conclusory statements, do not suffice.” Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009).

Furthermore, to survive dismissal pursuant to Rule 12(b)(6), a claim must contain sufficient

factual matter to “state a claim to relief that is plausible on its face.” Twombly, at 570. “A claim has

facial plausibility when the plaintiff pleads factual content that allows the court to draw the

reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, at 1950. While

a complaint need not contain “detailed factual allegations,” its “factual allegations must be enough

to raise a right to relief above the speculative level on the assumption that all the allegations in the

complaint are true.” Twombly, at 555. “[W]here the well-pleaded facts do not permit the court to

infer more than the mere possibility of misconduct, the complaint has alleged – but it has not

‘show[n]’ – ‘that the pleader is entitled to relief.’ ” Iqbal, at 1950 (quoting Fed. R. Civ. P. 8(a)(2)). 

In the final analysis, the task of determining plausibility is “context-specific [and] requires the

reviewing court to draw on its judicial experience and common sense.” Id. 

 III. DISCUSSION

Defendants have moved to dismiss Counts Two and Three of Plaintiff’s Second Amended

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Complaint. Count Two specifically states “unjust enrichment as to intellectual property covered by

the patent application” and Count Three states “conversion as to intellectual property covered by

the patent application.” Defendants argue that these claims must be dismissed because Plaintiff’s

claims are preempted by the Patent Act. 

Plaintiff has alleged the following with respect to Count Two, the unjust enrichment claim: 

“Defendants have been unjustly enriched by receiving, retaining and failing to return to Plaintiff

upon demand its designs and technology covered by the Patent Application, which, in justice and

equity, belong to Plaintiff. Hummel v. Hummel (1938), 133 Ohio St. 520, 528, 11 O.O. 221, 14

N.E.2d 923.” (Second Am. Compl. ¶ 22). And with respect to Count Three, the conversion claim,

Plaintiff alleges: “Defendants have wrongfully exercised dominion over Plaintiff’s IP, Designs and

technology covered by the Patent Application to the exclusion of the rights of Plaintiff, or have

withheld same from Plaintiff’s possession under a claim inconsistent with its rights. Crowe v.

Firstenergy Corp., 2011-Ohio-5092, 10CA023 (OHCA5).” (Second Am. Compl. ¶ 25). 

Defendants argue that these claims must be dismissed because the claims are based on

“designs and technology covered by the Patent Application.” (Second Am. Compl. ¶¶ 22 and 25). 

The Patent Application Plaintiff references was published by the United States Patent and

Trademark Office on January 13, 2011. Defendants assert that any claim for misappropriation of

trade secrets prior to the publication of the Patent Application are governed by the Ohio Uniform

Trade Secret Act. Plaintiff appears to have conceded this fact and, in fact, withdrew such claims and

substituted them for unjust enrichment and conversion based on the Patent Application. Defendants

argue that Plaintiff’s remedy on these claims is limited to seeking damages for patent infringement

if the patent ultimately issues. 35 U.S.C. § 1 et seq. Defendants, relying on Joyce v. General

Motors Corp., 49 Ohio St. 3d 93, 96 (Ohio 1990), argues that, “[i]f the patent does not issue, then

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Plaintiff has no protectable intellectual property.” (Defs.’ Mot. at 6). 

Plaintiff, however, argues that these are state law tort claims which involve no patent law

issue such as inventorship. Additionally, Plaintiff argues that courts have held that a case may

proceed on a non-patent theory, citing Fin Brand Positioning v. Take 2 Dough Productions, Inc.,

758 F.Supp.2d 37 (D. N.H. 2010). 

Plaintiffs in Fin Brand, however, asserted that defendants misappropriated services that

plaintiffs performed and other intellectual property that is not covered by patent law, including a

new logo and various marketing materials that plaintiffs allegedly developed. Based on these

allegations, the court held that “neither the pending patent application in particular, nor patent law

in general, has any bearing on those allegations.” Id. at 43. The court continued that where “a claim

for misappropriation, unjust enrichment, or unfair and deceptive business practices is supported by

both a patent theory and an “alternative, non-patent theory,” it may proceed on the non-patent

theory, notwithstanding that a pending patent application bars litigation of the patent theory.” Id.

citing HIF Bio, Inc. v. Yung Shin Pharmaceuticals Indus. Co., Ltd., 600 F.3d 1347 (Fed. Cir. 2010)

(allowing litigation of such claims, despite a pending patent application, where the plaintiffs alleged

misappropriation not only of their invention, but also of their experiments, experimental data, and

draft papers). 

To the extent that Plaintiff’s unjust enrichment and conversion claims depend on the

inventorship and patentability of the engines, such claim cannot be litigated while the Patent

Application is pending. See Fin Brand Positioning, 758 F.Supp.2d at 43. The question before this

Court, therefore, is what exactly is the subject of Plaintiff’s unjust enrichment and conversion

claims. Defendants argue, and the Court agrees, that Plaintiff’s claims are based entirely on

the ideas contained in the patent application. Defendants state that “[t]here are no ancillary “non6

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patent intellectual property” issues in this case.” (Defs.’ Mot. at 4). Both claims, as set forth in

Plaintiff’s Second Amended Complaint, specifically reference “designs and technology covered by

the Patent application.” Even the titles of each claim both state “as covered by the Patent

Application.” 

Accordingly, finding that Counts Two and Three of Plaintiff’s Second Amended Complaint

both reference designs and ideas covered by the Patent Application, those claims are barred by the

Patent Act. 

IV. CONCLUSION

Based on the aforementioned, the Court GRANTS Defendants’ Motion to Dismiss Counts

Two and Three of Plaintiff’s Second Amended Complaint. Counts Two and Three are hereby

dismissed. This case remains pending as to the remaining claims in this case. 

In light of the filing of the Second Amended Complaint and ultimately this Opinion and

Order, documents 22 and 30 are now MOOT.

 The Clerk shall remove Documents 22, 30, and 42 from the Court’s pending motions list. 

IT IS SO ORDERED.

 /s/ George C. Smith 

GEORGE C. SMITH, JUDGE

UNITED STATES DISTRICT COURT

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